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on Labour Economics |
| By: | Bruno Contini (University of Torino, LABORatorio R. Revelli and IZA); Claudia Villosio (R & P and LABORatorio R. Revelli) |
| Abstract: | We investigate various stylized facts on wage growth, labor mobility and firm size, to date unexplored in Italy. Using a wage decomposition that allows to separate "individual premiums" from firm-effects, we ascertain: (1) whether movers are better off than stayers; (2) whether firm size affects the outcome of workers’ mobility across; and (3) the extent to which did job displacement and redeployment inflict wage losses to downsized workers. The sample - a closed panel of full-time male employees, aged 20-50, at work from 1986 to 1991 - is drawn from the employer-employee linked database WHIP (Work Histories Italian Panel). |
| Keywords: | job mobility, wage growth, displaced workers |
| JEL: | J62 J63 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2622&r=lab |
| By: | Anabela Carneiro (Universidade do Porto and CETE); Pedro Portugal (Banco de Portugal, Universidade Nova de Lisboa and IZA) |
| Abstract: | This study investigates real wage cyclicality in Portugal for the years of 1986-98, addressing the heterogeneity in wages responses to aggregate labor market conditions for workers’ hirings and separations. The results exhibit a moderate procyclical behavior of real wages for continuously employed workers, in particular, for job stayers. For workers’ accessions a strongly procyclical behavior in wages was observed, which is consistent with the idea that entry wages are much more procyclical than current wages. This empirical evidence suggests that even micro-data estimates of real wage cyclicality may conceal a strong procyclical wage behavior, when heterogeneity on wages responses to aggregate conditions between employed workers and hirings and separations is not taken into account. |
| Keywords: | wage cyclicality, hirings, separations |
| JEL: | D21 J30 J31 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2604&r=lab |
| By: | Florentino Felgueroso; Juan Prieto Rodríguez; María José Pérez-Villadóniga |
| Abstract: | Several studies have found that in those countries where the wage structure is more egalitarian, the gender wage gap is lower. Also, a negative relationship between the level of collective bargaining centralization and the degree of wage inequality has been found: more centralised bargaining seems to lead to lower wage gaps. In this paper we study how the gender wage gap changes throughout the distribution of wages as a function of the level of collective bargaining by which workers are covered, using quantile regression estimation methods. Our main results indicate that women at the bottom of the wage distribution are subject to less discrimination when they are covered by sectoral (national or regional) agreements, while, at the upper part of the distribution, women under firm agreements suffer less discrimination. These results are consistent with the Median Voter Theorem: at the sectoral level, agreed wages are only minimum wages and unions seem to be more concerned about workers at the bottom of the distribution, so wage compression is more effective there. Hence, wage is close to agreed tariffs, resulting in a smaller wage differential and lower discriminatory component. On the other hand, when bargaining is conducted at the firm level, unions have a greater control over the contracts signed and the reduction in wage dispersion is more effective over the whole distribution. Therefore, differences in the discriminatory component are not so important. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2007-06&r=lab |
| By: | Bernd Fitzenberger (Goethe University Frankfurt, ZEW, IFS and IZA); Ralf A. Wilke (University of Leicester) |
| Abstract: | In light of nonstationary search theory (van den Berg, 1990), this paper estimates the effects of benefit entitlement periods and the size of unemployment benefits on unemployment durations and post-unemployment earnings in West Germany. For the unemployment duration, we estimate censored Box-Cox quantile regression, which is robust with respect to the specification of the unobserved error distribution and avoids the common proportional hazard assumption. Our results suggest that the length of benefit entitlement is only of minor importance for the duration of search unemployment and for post unemployment wages. A high wage replacement rate in the low wage sector seems to considerably elongate the duration of unemployment and it is associated with higher post unemployment wages. |
| Keywords: | Box Cox quantile regression, hazard rate, unemployment, wage |
| JEL: | C13 C14 J64 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2609&r=lab |
| By: | David Neumark (University of California, Irvine, NBER and IZA); William Wascher (Federal Reserve Board) |
| Abstract: | We study the effects of minimum wages and the EITC in the post-welfare reform era. For the minimum wage, the evidence points to disemployment effects that are concentrated among young minority men. For young women, there is little evidence that minimum wages reduce employment, with the exception of high school dropouts. In contrast, evidence strongly suggests that the EITC boosts employment of young women (although not teenagers). We also explore how minimum wages and the EITC interact, and the evidence reveals policy effects that vary substantially across different groups. For example, higher minimum wages appear to reduce earnings of minority men, and more so when the EITC is high. In contrast, our results indicate that the EITC boosts employment and earnings for minority women, and coupling the EITC with a higher minimum wage appears to enhance this positive effect. Thus, whether or not the policy combination of a high EITC and a high minimum wage is viewed as favorable or unfavorable depends in part on whose incomes policymakers are trying to increase. |
| Keywords: | minimum wage, Earned Income Tax Credit, welfare reform, employment |
| JEL: | H24 I38 J2 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2610&r=lab |
| By: | Mark Gertler (New York University); Antonella Trigari (Bocconi University) |
| Abstract: | A number of authors have recently emphasized that the conventional model of unemployment dynamics due to Mortensen and Pissarides has difficulty accounting for the relatively volatile behavior of labor market activity over the business cycle. We address this issue by modifying the MP framework to allow for staggered multiperiod wage contracting. What emerges is a tractable relation for wage dynamics that is a natural generalization of the period-by-period Nash bargaining outcome in the conventional formulation. An interesting side-product is the emergence of spillover effects of average wages on the bargaining process. We then show that a reasonable calibration of the model can account well for the cyclical behavior of wages and labor market activity observed in the data. The spillover effects turn out to be important in this respect. |
| Keywords: | Unemployment, Labor Market, Nash Bargaining, Wage Rigidity |
| JEL: | E32 E50 J64 |
| Date: | 2007–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:cfs:cfswop:wp200709&r=lab |
| By: | Stephen L. Ross (University of Connecticut); Yves Zenou (Research Institute of Industrial Economics, Stockholm, GAINS, CEPR and IZA) |
| Abstract: | Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the Public Use Microdata sample of the 2000 U.S. Decennial Census. The empirical results suggest that efficiency wages operate primarily for blue collar workers, i.e. workers who tend to be in occupations that face higher levels of supervision. For this subset of workers, longer commutes imply higher levels of unemployment and higher wages, which are both consistent with shirking and leisure being substitutable. |
| Keywords: | efficiency wage, leisure, urban unemployment |
| JEL: | J41 R14 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2601&r=lab |
| By: | Ana I Moro-Egido; Santiago Budría |
| Abstract: | The overeducation literature has typically assumed that the effect of overeducation on wages is constant across the conditional wage distribution. In this paper we use quantile regression and data from 12 European countries to show that differences across segments of the distribution are indeed large. Moreover, we investigate to what extent overeducation is related to (the lack of) unobserved skills. By differentiating between segments of the distribution, we discriminate between groups of workers with different skills. We find that the detrimental effects of overeducation among the high-skilled are even larger than among the low-skilled. This finding lends support to the view that overeducation is an event that reduces the worker’s potential productivity, regardless of his skills. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaeee:229&r=lab |
| By: | Marco Leonardi (University of Milan and IZA); Giovanni Pica (University of Salerno and CSEF) |
| Abstract: | In a perfect labor market severance payments can have no real effects as they can be undone by a properly designed labor contract (Lazear 1990). We give empirical content to this proposition by estimating the effects of EPL on entry wages and on the tenure-wage profile in a quasi-experimental setting. We consider a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for bigger firms. Estimates which account for the endogeneity of the treatment status due to workers and firms sorting around the 15 employees threshold show no effect of the reform on entry wages and a decrease of the returns to tenure by around 20% in the first year and by 8% over the first two years. We interpret these findings as broadly consistent with Lazear’s (1990) prediction that firms make workers prepay the severance cost. |
| Keywords: | Costs of Unjust Dismissals, Severance Payments, Regression Discontinuity Design |
| JEL: | E24 J63 J65 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:175&r=lab |
| By: | Hendrik Schmitz; Viktor Steiner |
| Abstract: | Abstract: We analyse benefit-entitlement effects and the likely impact of the recent reform of the unemployment compensation system on the duration of unemployment in Germany on the basis of a flexible discrete-time hazard rate model estimated on pre-reform data from the German Socioeconomic Panel (SOEP). We find (i) relatively strong benefit-entitlement effects for the unemployed who are eligible to means-tested unemployment assistance after the exhaustion of unemployment benefit, but not for those without such entitlement; (ii) non-monotonic benefit-entitlement effects on hazard rates with pronounce spikes around the month of benefit-exhaustion, and (iii) relatively small marginal effects of the amount of unemployment compensation on the duration of unemployment. Our simulation results show that the recent labour market reform is unlikely to have a major impact on the average duration of unemployment in the population as a whole, but will significantly reduce the level of long-term unemployment among older workers. |
| Keywords: | unemployment duration, unemployment insurance, benefit-entitlement effects, German labour market reforms, ex-ante evaluation, hazard rate model |
| JEL: | J64 J65 H31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp678&r=lab |
| By: | Kai Christoffel (European Central Bank); Keith Kuester (European Central Bank); Tobias Linzert (European Central Bank) |
| Abstract: | We focus on a quantitative assessment of rigid labor markets in an environment of stable monetary policy. We ask how wages and labor market shocks feed into the inflation process and derive monetary policy implications. Towards that aim, we structurally model matching frictions and rigid wages in line with an optimizing rationale in a New Keynesian closed economy DSGE model. We estimate the model using Bayesian techniques for German data from the late 1970s to present. Given the pre-euro heterogeneity in wage bargaining we take this as the first-best approximation at hand for modelling monetary policy in the presence of labor market frictions in the current European regime. In our framework, we find that labor market structure is of prime importance for the evolution of the business cycle, and for monetary policy in particular. Yet shocks originating in the labor market itself may contain only limited information for the conduct of stabilization policy. |
| Keywords: | Labor Market, Wage Rigidity, Bargaining, Bayesian Estimation |
| JEL: | E32 E52 J64 C11 |
| Date: | 2007–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:cfs:cfswop:wp200707&r=lab |
| By: | Gurleen Popli (Department of Economics, The University of Sheffield) |
| Abstract: | Over the period of the mid-1980s to the mid-1990s Mexico experienced a significant increase in wage inequality. The literature has typically attributed this rise in inequality to trade liberalization and foreign direct investment. We argue, however, that a better explanation can be found in the changing labor market institutions such as declining union power and the declining real value of the minimum wage. We offer evidence to suggest that these domestic institutional changes have indeed contributed to growing wage inequality, and show that the timing of these institutional changes better matches the trajectory of wage inequality in Mexico than does the timing of reforms. |
| Keywords: | Wage inequality, Structural reforms, Labor Market Institutions, Mexico. |
| JEL: | J31 J50 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2005016&r=lab |
| By: | Gobillon, Laurent; Selod, Harris |
| Abstract: | In this paper, we investigate how residential segregation and bad physical access to jobs contribute to urban unemployment in the Paris region. We first survey the general mechanisms according to which residential segregation and spatial mismatch can have adverse labour-market outcomes. We then discuss the extent of the problem with the help of relevant descriptive statistics computed from the 1999 Census of the Population and from the 2000 General Transport Survey. Finally, we estimate the effect of indices of segregation computed at the neighbourhood and municipality levels, as well as job accessibility indices on the labour-market transitions out of unemployment using the 1990-2002 Labour Force Survey. Our results show that neighbourhood segregation is a key factor that prevents unemployed workers from finding a job. These results are robust to potential location endogeneity biases. |
| Keywords: | residential segregation; sensitivity analysis; spatial mismatch; urban unemployment |
| JEL: | J64 R14 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6198&r=lab |
| By: | Joanne Kathryn Lindley; Marius Brullhart; Rob Elliott (Department of Economics, The University of Sheffield) |
| Abstract: | We re-examine the relationship between intra-industry trade and labour reallocation, using individual-level data on manufacturing worker moves in the United Kingdom. The contribution of this analysis is twofold. First, we estimate the impact of intra-industry trade on worker moves between occupations as well as between industries. Second, we run individual-level regressions that allow us to control for worker heterogeneity. Our results suggest that intra-industry trade does have the stipulated attenuating effect on worker moves, both between occupations and between industries, but that this effect is relatively small compared to other determinants of labour reallocation. |
| Keywords: | Intra-industry trade, worker mobility, labour-market adjustment. |
| JEL: | F1 J62 C25 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2005005&r=lab |
| By: | Demiralp, Berna |
| Abstract: | This paper presents a model of occupational choice in a labor market characterized by moral hazard. The model demonstrates that in such a labor market, workers' occupational choices are determined by not only their comparative advantage but also their effort decisions in each occupation. The estimation results, based on data from the National Longitudinal Survey of Youth, suggest that workers' self-selection into white collar and blue collar occupations leads to higher wages and lower dismissal rates in both occupations. Furthermore, analysis results reveal that these effects of self-selection diminish as the labor market becomes increasingly characterized by moral hazard. |
| Keywords: | occupational choice; moral hazard; self-selection; dismissals |
| JEL: | J63 J24 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2314&r=lab |
| By: | Carole Brunet (GATE CNRS); Andrew Clark (DELTA CNRS); Jean-Yves Lesueur (GATE CNRS) |
| Abstract: | The objective of this paper is to provide microeconomic evidence for the so called “Oswald’s hypothesis”, which is whether homeownership results in negative outcomes in the labour market. To estimate this effect we use two data base, comparing results from British Household Permanent Survey and French part of European Household Panel Survey. In a first step, a multinomial logit model for the choice of tenure status is estimated. Estimated probabilities of being either homeowner, public or private renter are then used to explain the length of an individual unemployment spell. This flexible method of estimation accounts for both censoring and selection bias, without constraining the shape of the hazard rate of leaving unemployment. Results suggested strong differences between French and British household behaviour. Home-ownership has a positive effect on unemployment duration in France but no significant effect is detected in Britain. However we find a positive impact of public renters on unemployment duration in Britain. These stylised facts seems to confirm the existence of a real spillover effect between labour market and housing market |
| Keywords: | unemployment duration, mobility, residential status |
| JEL: | C41 J6 R21 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0613&r=lab |
| By: | Brigitte Humer (Upper Austria University of Applied Sciences); Jean-Philippe Wuellrich (University of Zurich); Josef Zweimüller (University of Zurich, CEPR, CESifo and IZA) |
| Abstract: | We study the impact of the Austrian Employment Act for the Disabled which grants extended employment protection, requires a hiring quota for firms, and subsidizes the employment of severely disabled (SD) workers. Using a large sample of eligible individuals we compare workers before and after acquiring legal SD-status. Unsurprisingly, we find that holding SDstatus is associated with lower employment and earnings. However, workers holding a job when acquiring legal SD-status have substantially better subsequent employment prospects after SD-award than before. In contrast, workers who do not hold a job at the date of SDentry do dramatically worse after SD-award than before. This suggests that employment protection legislation places substantial firing costs on firms and has a major impact on the decisions of firms to hire disabled workers. |
| Keywords: | disability, employment protection |
| JEL: | J14 J71 K31 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2649&r=lab |
| By: | Namkee Ahn; Maite Blázquez |
| Abstract: | This paper undertakes an investigation of the relationship between housing tenure, residential mobility and job mobility. The analysis is done for Spain, France and Denmark, using data from the European Community Household Panel (ECHP, 1995-2001). The econometric technique consists of a bivariate probit model that allows us to account for the simultaneity of behaviors in housing and labor markets. Our results confirm the Oswald hypothesis only in the case of Denmark, where homeowners are found to be less mobile on the labor market. In contrast, the effect of homeownership on job mobility is small in France and no effect is shown in Spain. Finally, our results reveal that, in all countries, mobility is satisfaction driven: Those less satisfied in their job (housing) are more likely to change job (house), and lower satisfaction in commuting time increases job mobility but not residential mobility. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2007-05&r=lab |
| By: | Bigsten, Arne; Mengistae, Taye; Shimeles, Abebe |
| Abstract: | An analysis of panel data on individuals in a random selection of urban households in Ethiopia reveals large, sustained, and unexplained earnings gaps between public and private, and formal and informal sectors over the period 1994-2004. The authors have no formal evidence whether these gaps reflect segmentation of the labor market along either of these divides. In other words, they canno t show whether they are at least in part due to impediments to entry in the higher wage sector. But they do have evidence that, if segmentation explains any part of the observed earnings gaps, then it could only have weakened over the survey decade. The authors find, first, that the rate of mobility increased between the two pairs of sectors. Sample transition rates grew across survey waves, while state dependence in sector choice decreased. Second, the sensitivity of sector choice to earnings gaps increased over the same period. In particular, the role of comparative earnings in selection into the informal sector was evident throughout the survey decade and increased in magnitude over the second half of the period. |
| Keywords: | Labor Markets,Labor Standards,Work & Working Conditions,Markets and Market Access,Labor Management and Relations |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4168&r=lab |
| By: | Sebastian Calonico (Inter-American Development Bank); Hugo Ñopo (Inter-American Development Bank) |
| Abstract: | The private provision of educational services has been representing an increasing fraction of the Peruvian schooling system, especially in recent last decades. While there have been many claims about the differences in quality between private and public schools, there is no complete assessment of the different impacts of these two type of providers on the labor markets. This paper is an attempt to provide such a comprehensive overview. We explore private-public differences in the individual returns to education in Urban Peru. Exploiting a rich pair of data sets (ENNIV 1997 and 2000) that include questions on type of education (public vs. private) for each educational level (primary, secondary, technical tertiary and university tertiary) to a representative sample of adults we are able to measure the differences in labor earnings for all possible educational trajectories. The results indicate higher returns to education for those who attended private schools than those who attended the public system. Nonetheless, these higher returns also show higher dispersion, reflecting wider quality heterogeneity within the private system. The private-public differences in returns are more pronounced at the secondary than at any other educational level. On the other hand, the private-public differences in returns from technical education are almost non-existent. A cohort approach paired with a rolling-windows technique allows us to capture generational evolutions of the private-public differences. The results indicate that these differences have been increasing during the last two decades. |
| Keywords: | Returns to schooling; wages. |
| JEL: | J31 I2 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:1028&r=lab |
| By: | Roland Kirstein (University of Saarland); Annette Kirstein (Universität Karlsruhe) |
| Abstract: | The need for intra-firm incentive schemes allows remodeling the Cournot duopoly in wages (rather than in output levels). In both versions of the Cournot model, a cartel agreement is unstable. The new formulation, however, allows us to demonstrate that a collective wage agreement on minimum wages can stabilize the cartel solution. Beyond its relevance for strategic management, this result has a policy implication: competition authorities should observe collective wage agreements for their potential collusive effect on product markets. Moreover, the model may provide a new explanation why firms in reality pay lower than efficient variable wages and higher fixed wages than predicted by contract theory. |
| Keywords: | Principal-agent theory, piece rate, fixed wage, collective wage agreements, Nash bargaining solution., |
| JEL: | C72 C78 D43 J33 J50 K31 L41 |
| URL: | http://d.repec.org/n?u=RePEc:bep:dewple:2005-1-1129&r=lab |
| By: | Melvyn G. Coles (University of Essex); Marco Francesconi (University of Essex and IZA) |
| Abstract: | Toyboy marriages (where the female partner is at least 5 years older than her male partner) have grown threefold since the 1970s in the United States and Britain. This paper examines this phenomenon using an equilibrium search framework in which becoming successful in the labour market takes time and fitness decays with age. Our framework hinges on contract incompleteness in the marriage market and the assumption that the marginal gain to marrying someone rich is greatest for someone poor. With this structure we can explain why successful (older) types might marry fitter (younger) and less successful types. We show that toyboy marriages arise in equilibrium only when men and women have comparable labour market opportunities. U.S. and British data confirm this indicating that the probability that a woman is married to a toyboy increases by about 45 percent if, relative to her partner’s, she is more educated and in a better paid job. |
| Keywords: | two-sided search, marriage, ex-ante heterogeneity, non-transferable utility, ageing |
| JEL: | J12 J16 J62 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2612&r=lab |
| By: | Marco Vivarelli (Università Cattolica Piacenza, CSGR Warwick, Max Planck Institute of Economics Jena and IZA) |
| Abstract: | According to the "compensation theory", market forces should assure a complete compensation of the initial labour-saving impact of process innovations. In this paper a critique of this approach is proposed through a detailed survey of the theoretical and empirical literature on the subject. The general conclusion is that - although compensation is always working - the complete counter-balancing of dismissed workers cannot be assumed ex-ante. |
| Keywords: | innovation, technological unemployment, compensation |
| JEL: | J64 O33 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2621&r=lab |
| By: | Kamila Fialová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | The paper summarises the results of various economic concepts of minimum wage. Consecutively, it presents an analysis of the minimum wage development in the Czech Republic since its introduction in 1991 and of the impact of substantial changes in its level, which can be observed since 1999. The attention is focused on both its potential benefits in sense of reducing poverty and increasing the incomes of the poorest households, and on its potential negative impact on regional labour markets in sense of increasing unemployment. The results of the econometric analyses suggest that while there is a significant impact on increasing regional unemployment, potential benefits on raising incomes of the poor households seem to be insignificant. Therefore it seems valid to claim that minimum wage in the Czech Republic has not been a very purposeful instrument effective in decreasing poverty so far. |
| Keywords: | wage; poverty; regional unemployment |
| JEL: | I38 J31 J38 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2007_12&r=lab |
| By: | Sarah Brown; Karl Taylor (Department of Economics, The University of Sheffield) |
| Abstract: | We explore the effect of bullying at school on the educational attainment of a sample of individuals drawn from the British National Child Development Study (NCDS). Our empirical findings suggest that school bullying has an adverse effect on human capital accumulation both at and beyond school. Moreover, the impact of bullying on educational attainment at age sixteen is found to be similar in magnitude to class size effects, which have attracted recent attention in the economics literature. Furthermore, in contrast to class size effects, the adverse influence of bullying on human capital attainment remains during adulthood. In addition, being bullied at school directly influences wages received during adulthood as well as indirectly influencing wages via educational attainment. |
| Keywords: | Bullying, Education, Harassment, Human Capital. |
| JEL: | J24 Z12 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2005015&r=lab |
| By: | Betsey Stevenson (Wharton School, University of Pennsylvania); Justin Wolfers (Wharton School, University of Pennsylvania, CEPR, NBER and IZA) |
| Abstract: | We document key facts about marriage and divorce, comparing trends through the past 150 years and outcomes across demographic groups and countries. While divorce rates have risen over the past 150 years, they have been falling for the past quarter century. Marriage rates have also been falling, but more strikingly, the importance of marriage at different points in the life cycle has changed, reflecting rising age at first marriage, rising divorce followed by high remarriage rates, and a combination of increased longevity with a declining age gap between husbands and wives. Cohabitation has also become increasingly important, emerging as a widely used step on the path to marriage. Out-of-wedlock fertility has also risen, consistent with declining "shotgun marriages". Compared with other countries, marriage maintains a central role in American life. We present evidence on some of the driving forces causing these changes in the marriage market: the rise of the birth control pill and women’s control over their own fertility; sharp changes in wage structure, including a rise in inequality and partial closing of the gender wage gap; dramatic changes in home production technologies; and the emergence of the internet as a new matching technology. We note that recent changes in family forms demand a reassessment of theories of the family and argue that consumption complementarities may be an increasingly important component of marriage. Finally, we discuss how these facts should inform family policy debates. |
| Keywords: | marriage, divorce, fertility, cohabitation, remarriage, economics of the family, demography |
| JEL: | D1 H31 I3 J1 K36 N3 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2602&r=lab |
| By: | Mirko Abbritti (IUHEI, The Graduate Institute of International Studies, Geneva) |
| Abstract: | This paper derives a DSGE currency union model with labor market frictions, real wage rigidities and price staggering. The model combines many realistic features, but it is still tractable: like standard open-economy models, it can be closed in six equations. We derive and discuss the constrained efficient allocation and the decentralised equilibrium, under both flexible and sticky prices. We use the model to analyse how different labor market institutions or degrees of real wage rigidities influence the functioning of the currency union and the size and persistence of inflation and output differentials. We show that the presence of non trivial real imperfections affects substantially the transmission mechanism of shocks in general and, in particular, of monetary policy. Interestingly, we find that the implications of real wage rigidities and labor market frictions for business cycle fluctuations are likely to operate in opposite directions: a high degree of real wage rigidities tends to amplify the response of the real economy to shocks; when labor market are more sclerotic, instead, unemployment volatility tends to decrease while inflation volatility increases. |
| Keywords: | Currency Union, labor market frictions, real wage rigidities, unemployment, sticky prices, inflation and output differentials |
| JEL: | E32 E52 F41 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heiwp09-2007&r=lab |
| By: | Bilquees, Faiz |
| Abstract: | The paper looks at the trends in nominal and real salaries of the FederalGovernment employees over the period 1990-2006. It examines the structural defects in the existing salary structure and the anomalies in the allowances structure to show that appropriate remuneration for the civil servants requires serious and urgent consideration. The widening gap in the emoluments of government employees versus the public sector corporations and private sector employees has a strong bearing on the motivation and ability to work. The paper makes serious recommendations to overhaul the existing structure of salaries and perks to make the public sector employment competitive and cost-effective. |
| Keywords: | Civil services; Wages; Pakistan |
| JEL: | J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2245&r=lab |
| By: | Jian-Ping Zhou |
| Abstract: | The Danish flexicurity model has attracted attention among policymakers in Europe, because it suggests that a flexible labor market can coexist with a generous welfare system to achieve low unemployment. Using a panel of 19 countries over 1960-2002, the paper identifies the elements of the flexicurity model that may have contributed to the low unemployment rate. A theoretical model of dynamic policies is constructed to analyze whether the model can be emulated by other countries. Focusing on the financing aspect, the paper finds that effective implementation will depend on the initial unemployment level and budgetary situation of the country. |
| Keywords: | Labor market reform , unemployment , job and income security , Labor market policy , Denmark , Unemployment , Social policy , Public finance , Economic models , |
| Date: | 2007–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/36&r=lab |
| By: | Hans G. Bloemen (Free University Amsterdam, Tinbergen Institute, Netspar and IZA); Elena G. F. Stancanelli (CNRS, GREDEG, Nice, and OFCE, Sciences-Po, Paris) |
| Abstract: | This paper provides new estimates of the impact of the French tax credit on the employment outcomes of women. We model simultaneously the employment probability and the determinants of programme eligibility. We improve on earlier studies in this field that, using a single evaluation equation framework, predicted ex-ante programme eligibility. Within this framework, we also allow for hours responses. The data for the analysis are drawn from the French labour force surveys of years 1999 to 2002. We find no significant impact of the tax credit on either employment or hours of French women. |
| Keywords: | policy evaluation, difference-in-difference estimator, labour supply |
| JEL: | C34 I38 J21 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2607&r=lab |
| By: | Eckhard Janeba |
| Abstract: | The paper analyzes the labor market effects of globalization when foreign market entry is costly and risky. With flexible labor markets, a fall in foreign market entry cost tends to generate more income inequality. By contrast, when workers cannot easily switch industries and wages are inflexible in the short run, globalization tends to increase unemployment. In this situation, government unemployment benefits reduce the wages that exporting firm’s need to pay workers as risk compensation. Thus more firms within an industries and more industries become exporters. The above findings are consistent with popular views about the globalization effects in the U.S. and continental Europe. The results also suggest that the welfare state can simultaneously cause an increase in unemployment and exports. |
| Keywords: | Income inequality, unemployment, exporters, beachhead costs, globalization |
| JEL: | D4 F1 H2 |
| Date: | 2007–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:60&r=lab |
| By: | David G. Blanchflower (Dartmouth College, NBER, Bank of England and IZA); Jumana Saleheen (Bank of England); Chris Shadforth (Bank of England) |
| Abstract: | UK population growth over the last thirty-five years has been remarkably low in comparison with other countries; the population grew by just 7% between 1971 and 2004, less than all the other EU15 countries except Germany. The UK population has grown at a faster pace since the turn of the millennium driven primarily by changes in net migration, and in particular from an influx of migrants from eight East European (A8) countries. There appears to be consistent evidence from the Worker Registration Scheme and National Insurance Number applications that approximately 500,000 migrants from the A8 countries had come to work in the UK between May 2004 and late 2006. But other sources suggest approximately half of these workers have likely returned to their country of origin. We argue that, at present, it appears that A8 immigration has tended to increase supply by more than it has increased demand in the UK (in the short run). This migration flow, we argue, has acted to reduce inflationary pressures and to lower the natural rate of unemployment. |
| Keywords: | migration, UK |
| JEL: | J61 J11 J21 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2615&r=lab |
| By: | Olivier Blanchard (Massachusetts Institute of Technology); Jordi Galí (Universitat Pompeu Fabra) |
| Abstract: | We develop a utility based model of fluctuations, with nominal rigidities, and unemployment. In doing so, we combine two strands of research: the New Keynesian model with its focus on nominal rigidities, and the Diamond-Mortensen-Pissarides model, with its focus on labor market frictions and unemployment. In developing this model, we proceed in two steps. We first leave nominal rigidities aside. We show that, under a standard utility specification, productivity shocks have no effect on unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage setting mechanisms for fluctuations in unemployment. We then introduce nominal rigidities in the form of staggered price setting by firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence of real wage rigidities. We show the nature of the tradeoff between inflation and unemployment stabilization, and we draw the implications for optimal monetary policy. |
| Keywords: | New Keynesian Model, Labor Market Frictions, Search Model, Unemployment, Sticky Prices, Real Wage Rigidities |
| JEL: | E32 E50 |
| Date: | 2007–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:cfs:cfswop:wp200708&r=lab |
| By: | Eric V. Edmonds (Dartmouth College, NBER and IZA) |
| Abstract: | In recent years, there has been an astonishing proliferation of empirical work on child labor. An Econlit search of keywords "child lab*r" reveals a total of 6 peer reviewed journal articles between 1980 and 1990, 65 between 1990 and 2000, and 143 in the first five years of the present decade. The purpose of this essay is to provide a detailed overview of the state of the recent empirical literature on why and how children work as well as the consequences of that work. Section 1 defines terms commonly used in the study of child time allocation and provides a descriptive overview of how children spend their time in low income countries today. Section 2 reviews the case for attention to the most common types of work in which children participate, focusing on that work's impact on schooling, health, as well as externalities associated with that work. Section 3 considers the literature on the determinants of child time allocation such as the influence of local labor markets, family interactions, the net return to schooling, and poverty. Section 5 discusses the limited evidence on different policy options aimed at influencing child labor. Section 6 concludes by emphasizing important research questions requiring additional research such as child and parental agency, the effectiveness of child labor policies, and the determinants of participation in the "worst forms" of child labor. |
| Keywords: | child labor, human capital, time allocation, schooling |
| JEL: | J13 J22 O15 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2606&r=lab |
| By: | Bernd Fitzenberger (Goethe University Frankfurt, ZEW, IFS and IZA); Robert Völter (Goethe University Frankfurt and CDSEM, University of Mannheim) |
| Abstract: | Public sector sponsored training was implemented at a large scale during the transition process in East Germany. Based on new administrative data, we estimate the differential effects of three different programs for East Germany during the transition process. We apply a dynamic multiple treatment approach using matching based on inflows into unemployment. We find positive medium- and long-run employment effects for the largest program, Provision of Specific Professional Skills and Techniques. In contrast, the programs practice firms and retraining show no consistent positive employment effects. Furthermore, no program results in a reduction of benefit recipiency and the effects are quite similar for females and males. |
| Keywords: | multiple treatments, training programs, East Germany |
| JEL: | C14 J68 H43 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2630&r=lab |
| By: | Michael Fertig (RWI Essen and IZA Bonn); Marcus Tamm (RWI Essen and Ruhr-University Bochum) |
| Abstract: | This paper analyses the duration of child poverty in Germany. In our sample, we observe the entire income history from the individuals' birth to their coming of age at age 18. Therefore we are able to analyze dynamics in and out of poverty for the entire population of children, whether they become poor at least once or not. Using duration models, we allow poverty exit and re-entry to be correlated even after controlling for observable characteristics and also account for correlations with initial conditions. Our results indicate that household composition, most importantly single parenthood, and the labour market status as well as level of education of the household head are the main driving forces behind exit from and reentry into poverty and thus determine the (long-term) experience of child poverty. However, unobserved heterogeneity seems to play an important role as well. |
| Keywords: | child poverty, duration analysis, unobserved heterogeneity |
| JEL: | C41 D31 I32 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2645&r=lab |
| By: | canegrati, emanuele |
| Abstract: | In this paper I analyse a labour market where the wage is endogenously determined according to an Efficient Bargaining process between a firm and a labour union whose members are partitioned into two social groups: the old and the young. Furthermore, I exploit the Single-Mindedness theory, which considers the existence of a density function which endogenously depends on leisure. I demonstrate that, when preferences of one group for leisure are higher than those of the other group the latter suffers from higher tax rates and with lower level of wage rates and lower levels of leisure. Finally, since the former is more single-minded, it may exploit its greater political power in order to get a positive intergenerational transfer which takes place via labour income taxation. Empirical evidence from the WERS 2004 survey confirms main results of the model. |
| Keywords: | bargaining models; labour unions; labour-income taxation; single-mindedness |
| JEL: | H23 D11 J23 H61 J21 J18 J26 D74 J52 J58 D72 J22 H21 D63 I38 J51 H31 D91 D78 H24 H55 J11 J14 |
| Date: | 2007–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2320&r=lab |
| By: | Nil Demet Güngör (Atilim University); Aysit Tansel (Middle East Technical University and IZA) |
| Abstract: | The paper presents research findings on the return intentions of Turkish professionals residing abroad. The study uses a descriptive framework to establish the validity of several proposed models of non-return. The results are based on an internet survey of Turkish professionals abroad. Correspondence analysis is used to examine the relationship between return intentions and various factors that may affect this intention. The results emphasize the importance of student non-return versus traditional brain and appear to complement the various theories of student non-return. The respondents appear to come from relatively wellto- do families with highly educated parents. Many have earned their degrees from universities that have foreign language instruction. The recent economic crises in Turkey have negatively affected return intentions. We verify that return intentions are indeed linked closely with initial return plans, and that this relationship weakens with stay duration. Specialized study and work experience in the host country also all appear to contribute to explaining the incidence of non-return. Return intentions are weaker for those working in an academic environment. These results lead to important policy implications, some of which include the training of individuals for academic positions at domestic institutions, supporting study abroad for shorter periods and improving academic facilities in Turkey’s newly established universities. The government may support public and private R&D centers to increase the employability of returnees, but also to improve the quality of the higher education system in order to both reduce the need for education abroad and to increase the attractiveness of universities as prospective employment places for those acquiring education and experience abroad. |
| Keywords: | skilled migration, brain drain, return migration, return intentions, higher education, Turkey |
| JEL: | F22 J61 O15 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2617&r=lab |